1. Field of the Invention
This invention relates to mobile systems and methods for remotely processing real estate transactions in real-time and secure in-person transactions that are remote or offsite from the office.
2. Description of the Prior Art
An insurance company issues insurance for real property, and sometimes for other high value assets, such as airplanes, vessels and certain vehicles. Insurance companies also provide additional real estate services, including search and examination, commitment issuance, escrow, signing, settlement, and document recordation. Most of a company's services are performed in a traditional brick-and-mortar office setting because real estate and mortgage transactions must be conducted in the presence of a company representative or notary public. As a result, buyers, sellers and their agents and representatives typically travel to the company's office to sign the papers and “close” the transaction.
In certain legal jurisdictions many other documents must also be signed in front of a notary. Most documents requiring signing in front of a notary, such as financing documents, real estate documents and other legal papers include confidential personal information. Such confidential personal information includes driver's license numbers, social security numbers, names, signatures of the parties, bank account numbers, and other information related to identity theft. Recent changes to federal and state laws place greater burdens on parties with this information to keep it secure and protected. Due to the sensitive nature of this information and these new laws, the sending and receiving of such information must be absolutely secure, especially when conducted remote from or offsite from the main or satellite offices of a company, escrow company, lender, notary service or other business, particularly if the notary is an independent contractor and not an employee of such company. For many transactions, consumers are not comfortable conducting such transactions remotely from an office setting and therefore, true mobile document signings are very rare and those that are performed are limited to a notary bringing hard copies of the documents, prepared by and picked up from a home office.
As legal compliance with new privacy and identity theft laws becomes stricter, businesses must develop methods to protect personal information from threats of identity theft and fraud. This is particularly challenging when real estate and lending transactions are involved, especially given the types of personal information used in such transactions.
Companies currently address the inability to conduct secure off-site document signings with only two methods, both of which are problematic. The first method is to prepare all necessary documents prior to the off-site signing and mail or send by delivery service the prepared documents to the parties involved. The parties involved must then sign the previously prepared documents in the presence of a public notary, either provided by the company or hired individually by the parties, and then return the signed documents to the company by mail or delivery service. Although this method is commonly used, it is very problematic in view of the exemplary problems provided in further detail below. In view of the new privacy and identity theft laws, this method may not comply with the laws and therefore, has limited future use. In addition, this first method generally does not leave a positive impression with the clients of the company.
The second method is to have the company who prepares the documents provide a public notary who picks up the documents from the offices of the company and then travels to an off-site location, witnesses the signing of the documents by the parties at such location and then returns with the signed documents to the company. The second method is also problematic as detailed below.
While an off-site signing provides convenience for the parties to the transaction, it often delays the process and increases the risk that the signing will not take place on the desired date if changes or revisions to the documents are required after the documents are prepared, taken off-site but before the signing of the documents by the parties. For example, one significant problem with providing the documents by mail or delivery service is the time required to complete the transaction after the company sends the documents, sign the documents and then return them by mail or the delivery service. While waiting for the company to review and approve the signed documents, some of the parties to the transaction may be waiting to receive significant sums of money from the transaction, or waiting for funds from the signing to become available.
Another problem with mailing the documents is that no matter how clearly the company provides instructions or labels the documents, the parties, who typically rarely participate in such transactions, may make a mistake in the documents. The mistake may be as simple as one party signing in the wrong location, a spouse not signing the documents, signing with a different or incomplete name, or not returning a complete set of signed documents to the company. Furthermore, if the documents are mailed to the parties, the parties must still schedule a time with a public notary who must witness the signing of the documents.
Another problem with documents either mailed, provided by a delivery service or brought to the signing by a public notary are revisions that are necessary at the signing, including changes to the loan amount, commission split, new negotiated terms, or any number of additional issues relating to the transaction, including mistakes by the company who prepared the documents. Changes to address such issues commonly occur or are only noticed after the company sends the documents, typically when the parties are ready to sign. A traditional off-site public notary is unable to make these changes at the signing. Most changes require new documents from the preparing company (typically necessitating special software used in the original preparation of the documents) and in many instances require new documents from the lender (which can only be made by the lender and must be re-sent to the company) and then provided again to the signing parties. Therefore, to change the documents, the parties must request new documents be mailed, or if present, the company's public notary must travel to the office to obtain the new documents and come back at a later time with the revised documents. Typically changes require rescheduling the signing or even travel by the parties to the office of the company preparing the documents. In view of the above challenges, many signings are delayed, and any delay can adversely affect transactions having specific signing deadlines.
Another challenge for off-site signings is the inability to receive and disburse secure funds at a remote location. Funds cannot be distributed to the parties at the signing until funds are received from the lender. Funds may be received via wire transfer or check. Once the funds are received and verified, the company can print, sign, and issue the checks. At an off-site signing, a public notary does not have the capability to communicate with the lender, deposit funds, change amounts, or print and sign the checks.
Because off-site public notaries do not have access to the necessary software to prepare the documents as described above and typically cannot receive new documents from the lender, the signing would be cancelled or best case, significantly delayed. In addition to causing significant inconvenience and aggravation for all parties involved in the transaction, it is also possible that a delay could affect whether the transaction ever closes. For example, failure to close a transaction as planned may result in the loss of an interest rate lock, expiration of a purchase agreement between a buyer and a seller, the inability to take advantage of tax-deferrals (such as 1031 exchanges), and increased costs relating to accrued interest and finance charges on debts to be paid at the signing. Any delay is inefficient, reduces productivity of the company, and negatively affects the reputations of the professionals involved in the transaction. Even so, many times the document must be significantly changed to account for changes on the date of signing through no fault of the company preparing the documents. Delays also increase the expense to the company and significantly reduce productivity. For example, travel to and from a signing may require several hours for the notary or signing personnel and not signing at the scheduled time may require repeating the signing in the future at the cost of several more hours.
In addition, it is difficult for companies to ensure the security of transactions if documents are left in the hands of a public notary, many times who were hired by the parties to the transaction, and not the company, or only for a single transaction. The transaction may occur in an area significantly remote from the office location and therefore not practically accessible under current methods by an employee of the company at the home office. In such instances, the company typically hires a public notary who is an independent contractor and is only used for a single transaction. While attempts are currently made to ensure the reliability and trustworthiness of employees and independent contractors who handle sensitive confidential information, so far companies have had limited success in ensuring the security of document including personal confidential information when transactions occur remote from the home office.